Economy of the Middle East

The combined economic activity of Middle Eastern countries, shaped by oil and gas, trade routes, uneven resource distribution, and varied national development paths.

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Petroleum industry: The extraction, processing, transport, and sale of petroleum and its products. Oil exports anchor public revenue and international trade in several Middle Eastern economies.
Strait of Hormuz: A narrow waterway between Iran and Oman linking the Persian Gulf with the Gulf of Oman. A large share of seaborne oil exports from the region passes through this chokepoint.
Oil curse: The tendency for resource-rich economies to experience weaker or more uneven development than resource wealth alone would predict. It captures risks that can accompany the region’s dependence on petroleum income.
Oil price: The market value of crude petroleum, shaped by supply, demand, expectations, and geopolitical conditions. Price swings alter export earnings and public budgets in producing countries.
Natural gas industry: The extraction, processing, transport, and sale of natural gas. Gas exports and domestic energy use are major parts of regional production.
Suez Canal: An artificial sea-level waterway in Egypt connecting the Mediterranean Sea and the Red Sea. Its transit fees and shipping route make it a significant Egyptian economic asset.
Dutch disease: A decline in other tradable sectors caused when a resource boom raises domestic costs or the currency’s value. Resource booms can make manufacturing and other exports less competitive.
Remittances: Money migrants send to people or institutions in their places of origin. Workers abroad provide income to households and foreign exchange to several regional economies.
Rentier state: A state that relies heavily on externally derived rents, often from natural resources, rather than broad domestic taxation. Resource rents shape government spending, taxation, and political-economic relationships.
OPEC: An intergovernmental organization coordinating the petroleum policies of its member countries. Several Middle Eastern producers use OPEC frameworks to coordinate oil policy.